From: Biniam Tekle (biniamt@dehai.org)
Date: Thu Jan 29 2009 - 11:40:52 EST
Russia, China Slam U.S. Economic System, Blame Capitalism
*Thursday , January 29, 2009*
The premiers of Russia and China slammed the U.S. economic system in
speeches Wednesday, holding it responsible for the global economic crisis.
Both focused on the role of the U.S. dollar, with China's Premier Wen Jiabao
calling for better regulation of major reserve currencies and Russia's Prime
Minister Vladimir Putin calling over-reliance on the dollar "dangerous."
Speaking on the opening day of the World Economic Forum in Davos,
Switzerland, they both urged more international cooperation to escape the
downturn. They also talked up the abilities of their own economies to ride
out the recession. Wen said he was "confident" China would hit its 8 percent
growth target for this year even though that was "a tall order."
The Russian and Chinese leaders also called for cooperation with President
Barack Obama, but it was a chilly reception for the new administration that
reflected growing anger in economies that are now getting hit hard by a
financial crisis that began with subprime mortgages sold in the U.S.
Putin was characteristically blunt. He called for the development of
multiple, regional reserve currencies in addition to the dollar. "Excessive
dependence on a single reserve currency is dangerous for the global
economy," Putin said.
The Russian leader mocked U.S. businessmen who he said had boasted at last
year's Davos meeting of the U.S. economy's fundamental strength and
"cloudless" prospects. "Today, investment banks, the pride of Wall Street,
have virtually ceased to exist," he said.
Earlier, Wen called for an expansion of regulatory "coverage of the
international financial system, with particular emphasis on strengthening
the supervision on major reserve currencies."
While Wen never named the U.S., his critique of its failings was as sweeping
as Putin's. The financial crisis, he said, was "attributable to
inappropriate macroeconomic policies of some economies and their
unsustainable model of development characterized by prolonged low savings
and high consumption; excessive expansion of financial institutions in blind
pursuit of profit" — and other excesses.
"The entire economic growth system, where one regional center prints money
without respite and consumes material wealth, while another regional centre
manufactures inexpensive goods … has suffered a major setback," Putin said.
Wen's comments came just days after Treasury Secretary Timothy Geithner
accused China of manipulating its currency for economic gain. The Chinese
premier gently, but firmly warned that if Washington and Beijing chose
confrontation, both would be losers.